Mobile Video Advertising: Your call is important to us, please hold the line

If I had a dollar for every time I’ve heard someone reassure me that “this is the year of mobile,” I’d currently be enjoying early retirement from my waterfront beach house, at the ripe old age of 26. And yet here we are Australia, still stuck on hold, listening to the music, as other world markets reap the benefits of targeting consumers on this pocket-sized screen. So what’s the hold up? What needs to happen in order to grow mobile from an afterthought, to an integral part of screen-agnostic planning?

For me, there are a number of areas we need to consider in order to push Australia’s mobile advertising market to the head of the line. One of the key failings to date has been the limitations around mobile’s technology infrastructure. Processing speeds, handset limitations, screen size, pricey data tariffs and poor coverage have all contributed to slow and frustrating growth in the mobile space. Over the last few years, we’ve made huge improvements in all of these areas. According to an Australian Smartphone Market study conducted by research firm Telstye, mobile adoption is skyrocketing, with 90% of mobile phone users in 2015 stating a smartphone as their primary device, up from 50% in 2011.

So the handsets aren’t the issue. What about ad formats? In the early years, the combination of device limitations and small screens meant that ads were clunky, with pretty limited functionality or impact. Banners were small, and their static nature wasn’t conducive to clearly delivering brand messages. With the introduction of smartphones and their improved capabilities, came the opportunity to start delivering more immersive and interactive formats. Video advertising is a great example of this, as consumers were already familiar with the format, having been exposed to it via their desktop device. Mobile video finally gave brand advertisers a favourable medium to deliver their message to a captive audience.

The rapid increase in smartphone penetration in the Australian market will no doubt have a profound effect on the overall media landscape. It’s my belief that 2015 will be the tipping point where we’ll see more traffic and revenue generated by smartphones than PCs in Australia, but before that happens, we need to iron out a few kinks. All players within the market, whether they be demand, supply, technology, telcos, manufacturers or industry bodies, need to work together to aid the growth of mobile advertising. Speaking from my experience operating within the mobile video space specifically, here are three main areas I believe need to be addressed: 

Audience Targeting: One of the biggest limitations mobile video brand advertiser’s struggle with currently, is the ability to successfully deliver their ads to the right person, at the right frequency. The reason for this is the dependence on the cookie, which only runs on mobile web, not applications. 

Performance & Audience Measurement: Measurement of mobile video advertising is way behind the other media platforms. Until advertisers can measure things that are now becoming currency – Viewability and Nielsen OCR for example – in addition to general performance metrics, advertisers will struggle to view mobile as a credible medium for video brand advertising.

Inventory Type: While the rest of the Australian video advertising market is significantly supply constrained (that’s a whole separate article!), mobile doesn’t have this issue. The reason for this is because not all mobile ‘video’ is considered in line with tradition pre-roll video. A lot of mobile video is delivered via traditional display formats, which don’t lend themselves to a great user experience. This can be seen from the extremely high CTR on mobile, which can be attributed to users struggling to close the interstitial units they feel is invading the content they’re trying to consume.

I also believe the future of device-matching will be a key factor to the success of mobile advertising, however the techniques used to uncover this information need to be fully understood. There are two main techniques used to match people to their device - deterministic and probabilistic.

Deterministic device matching relies on PII (Personally Identifiable Information) made available through log-in systems such as Google, and Facebook. Data Management Platforms (DMPs) de-couple the PII and anonymise the user data, in order to utilise this information for 3rd party targeting. This allows advertisers to know exactly who the user is, as long as they are logged in. While this is the most accurate approach it does lack scale, and many of the deterministic approaches rely on walled gardens, which limit the environments that it can run on. 

Probabilistic device matching makes predictions based on a large range of data points that are analysed using various algorithms and learning systems. This approach scales more effectively than any deterministic approach, as people can be paired across platforms. The draw back to this approach is that it may be seen as less accurate as the data is inferred, however the targeting accuracy can be greatly improved by the self-learning nature of the algorithms that sit behind it.

Nearly everyone in Australia has a smartphone, and it’s not all doom and gloom for mobile. The mobile ecosystem is working right now, but it’s not reaching its full potential. I strongly believe the wide adoption of VPAID 2.0 by all the major Australian publishers, and improvements to measurement will help mobile move from a fragmented mess to a transparent accountable win-win market for both publishers and advertisers. 2015 might finally be Australia’s “year of mobile.”

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